When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.
Tech Alert - PayPal Holdings, Inc. (PYPL) - EXPIRATION
EXPIRATION of PayPal Holdings, Inc. (PYPL) November 2020 $170-$175 in-the-money vertical BULL call spread at $5
Closing Trade - NOT FOR NEW SUBSCRIBERS
11-20-2020
expiration date: November 20, 2020
Portfolio weighting: 10%
Number of Contracts = 22 contracts
Provided that PayPal shares don’t drop more than 10% by the end of the day, you will realize the maximum potential profit in the PayPal November 2020 $170-$175 in-the-money vertical Bull Call spread at $5.
Congratulations! You made $1,210 or 12.10% in 12 days.
Well done and on to the next trade!
You don’t have to do anything with this expiration.
Your broker (are they still called that?) will automatically use your long position to cover your short position, canceling out the total holdings.
The entire profit will be credited to your account on Monday morning November 23 and the margin freed up.
Some firms charge you a modest $10 or $15 fee for performing this service.
The logic behind this trade was very simple.
The opening up of the economy isn’t priced into tech shares yet and PayPal is the bellwether of digital small business consumerism.
This is why shares held up when other tech companies have struggled in the short-term.
Here are the specific trades you need to exit this position:
Expiration of 22 November 2020 (PYPL) $170 calls at………….………$24.45
Expiration of short 22 November 2020 (PYPL) $175 calls at………….$19.45
Net Proceeds:……………………..……...............................………..…….....$5.00
Profit: $5 - $4.45 = $.55
(22 X 100 X $.55) = $1,210 or 12.10% in 12 days
